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Kaival Patel was convicted last December in Camden federal court of conspiracy, health care fraud, and money laundering, US Attorney Phillip Sellinger said. Patel must also pay $4.72 million in restitution and serve three years of supervised release, Sellinger said.
According to court documents and trial evidence, Patel operated ABC Healthy Living LLC, a company that marketed high-cost compounded medications, which are specialty prescriptions tailored for individual patients. Patel and his co-conspirators exploited insurance plans covering state and local government employees by seeking reimbursements for medications such as scar creams, pain creams, and libido enhancers—often unnecessary for the patients prescribed, Sellinger said.
Patel enlisted his family member, a Newark-based doctor, to issue fraudulent prescriptions for patients without medical need, Sellinger said. To maximize profits, Patel worked with a pharmacist to inflate the cost of the medications by adding unnecessary ingredients, Sellinger said.
Patel also paid people to visit the doctor's clinic and obtain these prescriptions, ensuring the scheme's continued flow of fraudulent claims, Sellinger said. The investigation revealed that Patel laundered proceeds from the scheme through a series of financial transactions, Sellinger said.
The ongoing investigation has seen 48 people convicted or plead guilty.
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